City of Geelong Planning Scheme Amendment C297
Drysdale – Retail Demand and Supply
Statement of Economic Evidence of Gavin Duane for Planning Panels Victoria
14th November 2014
City of Geelong Planning Scheme Amendment C297
TABLE OF CONTENTS
1
INTRODUCTION ..................................................................................................................................... 1
2
AMENDMENT C297 ............................................................................................................................... 3
3
GREATER GEELONG PLANNING SCHEME ............................................................................................. 4
4
JETTY ROAD URBAN GROWTH PLAN ................................................................................................... 14
5
DRYSDALE CLIFTON SPRINGS STRUCTURE PLAN ................................................................................ 16
6
DRYSDALE URBAN DESIGN FRAMEWORK ........................................................................................... 18
7
MACROPLAN DIMASI ECONOMIC IMPACT ASSESSMENT 2013 .......................................................... 20
8
TIM NOTT REVIEW OF ECONOMIC ASSESSMENT ................................................................................ 21
9
MACROPLAN DIMASI ECONOMIC IMPACT ASSESSMENT 2014 .......................................................... 24
10
TRADE AREA ANALYSIS – DRYSDALE TOWN CENTRE .......................................................................... 29
11
RETAIL FLOORSPACE DEMAND ........................................................................................................... 37
12
CONCLUSIONS ..................................................................................................................................... 47
APPENDIX 1 ................................................................................................................................................. 49
APPENDIX 2 ................................................................................................................................................. 51
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1
INTRODUCTION
Personal Details
1.1
My residential address is 43 Earl Street, Randwick, Sydney New South Wales
2031.
1.2
I am an economist and Director of Location IQ.
Qualifications and Experience
1.3
I have provided independent advice in the field of market analysis and strategic
research for a wide range of clients in the retail and shopping centre industry.
This included working for the following firms:
i.
JHD Advisors: November 1993 – December 2002.
ii.
Dimasi Strategic Research/Pitney Bowes MapInfo: April 2003 – December
2009.
iii.
1.4
Location IQ: January 2009 – Present.
I regularly appear as an independent expert in State Planning courts and
tribunals in relation to matters such as Economic Impact Assessments, retail
market definitions, industry trends, market shares, consumer behaviour, retail
sustainability and the implications of all of the above.
1.5
Key clients in the area of shopping centre and retail development include The
GPT Group, Lend Lease, Stockland and Woolworths Limited.
1.6
Attached as Appendix 1 is my detailed curriculum vitae.
Instructions
1.7
I have prepared this statement, which investigates the economic implications of
Amendment C297 as they relate to supply of and demand for retail facilities,
particularly supermarket facilities in the Drysdale area, based on instructions
received from Best Hooper Solicitors.
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1.8
In preparing this Statement of Evidence, I have not received any instructions to
accept, adopt or reject any particular opinion.
1.9
I have reviewed the following documents in order to prepare this Statement of
Evidence:
i.
The Amendment C297 exhibition documents.
ii.
The submissions, including economic evidence, in relation to Planning
Amendment C297.
1.10
iii.
The Greater Geelong Planning Scheme.
iv.
The Geelong Retail Strategy, 2006.
v.
The Drysdale Clifton Springs Structure Plan adopted September 2010.
vi.
The Drysdale Urban Design Framework adopted August 2012.
vii.
Amendment C194 panel report.
viii.
Amendment C277 panel report and documents.
I have made all of the enquiries that I believe are desirable and appropriate and
no matters of significance which I regard as relevant have to my knowledge been
withheld from the panel.
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2
AMENDMENT C297
2.1
The Greater Geelong City Council has prepared Amendment C297 in relation to
land at 32 Murradoc Road at Drysdale. The Amendment was made at the
request of ERM Australia on behalf of Coles Property Group.
2.2
The Amendment proposes to rezone the land from the Commercial 2 Zone to
the Commercial 1 Zone.
2.3
Concurrent with the preparation of the Amendment, a planning application is
also proposed for the land at 24 – 26 and 28 – 30 Murradoc Road at Drysdale,
(which are presently in the Commercial 1 Zone), with the land at 32 Murradoc
Road in Drysdale, seeking approval for building works to construct a Coles
supermarket of 3,892 sq.m supported by 146 car parking spaces and loading
bays.
2.4
The explanatory report for Amendment C297 says that the most relevant local
policies to be considered in the assessment of the Amendment are as follows:
i.
Clause 21.07 – Economic Development.
ii.
Clause 21.14 – The Bellarine Peninsula.
iii.
Clause 22.03 – Assessment Criteria for Retail Planning Applications.
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3
GREATER GEELONG PLANNING SCHEME
3.1
The explanatory report of the Amendment C297 referred specifically to Clause
21.07, Clause 21.14 and Clause 22.03 of the Greater Geelong Planning Scheme
as being relevant as part of the assessment of the Amendment.
3.2
I am not a Town Planner, however, I have reviewed those clauses to assist in the
preparation of my evidence.
Clause 21.07 – Economic Development and Employment
3.3
Clause 21.07 relates to Economic Development and Employment within the City
of Greater Geelong. Specifically under the sub‐heading of Retail in 21.07 – 1, the
following is stated:
i.
The City of Greater Geelong Retail Activity Centre Hierarchy has been
established to articulate the role and function fulfilled by centres of
different sizes.
ii.
The retail hierarchy supports the primacy of Central Geelong as the focus of
retail activity in the region.
iii.
3.4
There is a need to ensure a mix of commercial uses in activity centres.
Clause 21.07 – 3 entitled Retail identifies objectives which include the following:
i.
To facilitate the development of vibrant and viable retail activity centres in
accordance with the Geelong Retail Activity Centre Hierarchy included at
Clause 21.07 – 8.
ii.
To ensure all major retail developments, and out of centre developments,
provide a clear net community benefit.
3.5
Under the heading of Strategies in the same Clause 21.07 – 3, some of the key
points are as follows:
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i.
Ensure that new retail development is directed to activity centres and is
consistent with the role and function described in the Retail Activity Centre
Hierarchy included at Clause 21.07 – 8.
…
ii.
Require that applications for new centres establish the retail need for such
use and development and demonstrate that there are no adverse impacts
on the operation of the retail activity centres hierarchy.
3.6
Clause 21.07 – 8 includes a map of the City of Geelong retail hierarchy together
with a table outlining identified centres and their indicative schemes as
illustrated below.
3.7
In relation to this amendment, the key points that emerge from Clause 21.07, in
my view, are as follows:
i.
The Jetty Road site is identified as a potential Neighbourhood Centre and is
now under development. Existing Neighbourhood centres are identified to
be between 2,500 sq.m to 25,000 sq.m in size, including a supermarket.
ii.
The Town Centres designation sits one level lower than Neighbourhood
Centres in the hierarchy, and include, Drysdale Town Centre. Indicative
floorspace in the Town Centre is 1,500 – 15,000 sq.m including
supermarket, mini‐majors and specialty shops.
iii.
Any new development proposal needs to consider the possible impacts on
existing and proposed centres and in particular, (in relation to Amendment
C297), whether the proposed Amendment will impact on the functioning of
Jetty Road Neighbourhood Centre and/or Drysdale Town Centre.
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MAP 3.1 – RETAIL HIERARCHY
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TABLE 3.1 – HIERARCHY DESIGNATIONS
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Clause 21.14 – The Bellarine Peninsula
3.8
Clause 21.14 outlines the key objectives and strategies to guide development on
the Bellarine Peninsula. Some of the key objectives at Clause 21.14 – 2 include:
i.
To facilitate the development of Ocean Grove, Drysdale/Clifton Springs and
Leopold as hubs of development and service provision on the Bellarine
Peninsula. In all of the townships on the Bellarine Peninsula, provide retail,
commercial and community uses and facilities that serve the daily needs of
the community and encourage street based activity.
ii.
To provide for sustainable industrial, commercial, retail, agricultural and
tourism development in designated locations, to service the wider Bellarine
community.
3.9
Under the heading of Strategies in Clause 21.14, the most relevant point to my
assessment is the strategy to “ensure land use and development proceeds
generally in accordance with the relevant Structure Plan maps included in this
Clause”.
3.10
Under the sub‐heading Drysdale Clifton Springs in Clause 21.14, the most
relevant point is:
i.
Reinforce the Drysdale Town Centre as the primary retail centre including
the development of an additional supermarket.
3.11
Under the heading of Implementation in Clause 21.14 – 3 in relation to Drysdale
Clifton Springs, I note the following:
i.
Investigate the relocation of the bowling club and the Council depot site on
Collins Street to support a combined rezoning and planning permit
application on the Drysdale Bowling Club site to facilitate the development
of a supermarket.
ii.
Development and implement an Urban Design Framework for the Drysdale
Town Centre, including the Business 4 zoned land along Murradoc Road.
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3.12
Clause 21.14 – 10 outlines the Drysdale Clifton Springs Structure Plan, illustrated
in Figure 3.1 below. Clause 21.14 – 11 outlines the Jetty Road urban growth
map, illustrated as Figure 3.2 below.
3.13
Based on the above, I have concluded that it is intended that the Drysdale Town
Centre is to remain the focus for retail activity even though the hierarchy of
centres designates Neighbourhood Centres above Town Centres in Clause 21.08.
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FIGURE 3.1 – DRYSDALE CLIFTON SPRINGS STRUCTURE PLAN
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FIGURE 3.2 – JETTY ROAD URBAN GROWTH MAP
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Clause 22.03 Assessment Criteria for Retail Planning Applications
3.14
This Clause states that the policy applies where a planning amendment or
planning permit application is required for new or expanded provision of retail
floorspace.
3.15
Under the heading of Objectives the following is stated:
i.
To ensure that applications for new centres establish the retail need for
such use and development, and demonstrate that there are no adverse
impacts on the operation of the retail activity centres hierarchy.
ii.
To ensure that applications involving a planning scheme amendment in or
adjoining additional activity centres clearly establish a need for such use
and development, and demonstrate that there are no adverse impacts on
the operation of the retail activity centres hierarchy.
iii.
To ensure all major retail use and development provide clear net
community benefits.
iv.
To allow/guide consideration of the applications involving increase in an
identified floorspace cap, in order to accommodate the change in retail
trends and retail demand.
3.16
Under the heading of Economic Impact Assessments, it is stated that an
economic impact assessment should be provided for proposals involving a key
major tenant such as a supermarket as is the case in Amendment C297.
3.17
The remainder of the Clause outlines the information that should be included
within an economic impact assessment including retail demand, retail supply,
escape spending, impact on existing retail facilities, net community benefit and
sequential testing approach to alternate sites. Appendix Two outlines the key
information required for economic impact assessments from the Planning
Scheme.
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City of Greater Geelong Retail Strategy
3.18
A retail strategy was prepared by Essential Economics for the City of Greater
Geelong and dated June 2006. I have reviewed that document for the purposes
of preparing my evidence, but it does not contain anything that I would regard
as being of particular relevance to my assessment.
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4
JETTY ROAD URBAN GROWTH PLAN
4.1
The Jetty Road Urban Growth Plan was prepared by the City of Greater Geelong
and adopted in June 2007 and amended in September 2008, following Council
adoption of Amendment C129. The Plan sets the strategic direction for the
development of land in the Jetty Road growth area.
4.2
The Jetty Road Urban Growth Structure Plan was illustrated in Section 3
previously. The Jetty Road Urban Growth Plan outlines an ultimate population in
the Jetty Road Urban Growth area of 3,300 lots or around 8,000 persons.
Development was indicated over a 25 year period.
4.3
Under the heading of Community Infrastructure and Activity Centres on pages
49 and 50 of the Plan, I note the following:
i.
The Drysdale Town Centre is designated at the top of the local activity
centre hierarchy.
ii.
The primary trade area to be served by a Neighbourhood Activity Centre in
the Jetty Road growth area is intended to be limited to the growth area.
The balance of Drysdale/Clifton Springs will provide a secondary trade
area. This classification reflects the need to support the regional hierarchy
of activity centres.
iii.
The UGP provides for a Neighbourhood Activity Centre with commercial
floorspace up to 5,000 sq.m, including a limited range convenience
supermarket (approximately 2,500 sq.m).
4.4
Based on the above, the trade area for the Jetty Road NAC was always
understood to overlap with the catchment of the Drysdale Town Centre in the
immediate Drysdale/Clifton Springs urban areas. This is typical of any retail
hierarchy where centres have overlapping catchments.
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4.5
The Jetty Road NAC, therefore, was not only intended to serve the Jetty Road
growth area but also the balance of Drysdale/Clifton Springs, as long as it was
not designated at the top of the local activity centre hierarchy.
4.6
The approval in January 2013 of the current centre under construction at the
Jetty Road NAC of 4,440 sq.m including a supermarket of 3,200 sq.m is
consistent with the Jetty Road Urban Growth Plan. The centre at 4,444 sq.m is
much smaller in size and range of stores than the Drysdale Town Centre, even if
the approved supermarket at the NAC is slightly larger than the existing
Woolworths in the Town Centre.
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5
DRYSDALE CLIFTON SPRINGS STRUCTURE PLAN
5.1
The Drysdale Clifton Springs Structure Plan (DCSSP) was prepared by the City of
Greater Geelong and adopted in September 2010. The DCSSP is a strategic
framework for the future development of the townships.
5.2
Section 3.3.3 of the document is entitled Economic Development and
Employment with a sub heading on page 13 of Land Use – Retail. It states in that
section that the Town Centre not only services Drysdale Clifton Springs but also
acts as a service centre for nearby communities such as Portarlington, St
Leonards and Indented Head.
5.3
Page 14 of the document indicates that there was an economic analysis
undertaken as part of the structure plan development which indicated the need
for 9,700 sq.m of the retail/commercial floorspace in the trade area (not just the
Drysdale township) by 2021, and up to 14,000 sq.m by 2031. It goes on to state
at the bottom of the same page that:
“If Aldi does go ahead on the Murradoc Road site, this would be the short
term option satisfied and a large supermarket would not be required for some
time. The size of the other supermarket (on the Bowling Club site) should
reflect the constraints of the site and be justified by an economic impact
statement that assesses the impact on existing and proposed activity centres
at Drysdale, the Jetty Road Growth area and Portarlington.”
5.4
Page 15 of the document specifically discusses the possible supermarket at the
bowling club site. It is noted that the site is large enough to accommodate a
supermarket and some specialty stores and parking, and is largely owned by
Council. Page 16 then outlines an alternative supermarket site at Murradoc Road
with the potential to include the Aldi supermarket, which has now proceeded.
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5.5
In Part B of the document entitled Implementation and Review on page 36, it is
stated that the Drysdale Bowling Club site be rezoned to Business 1 to facilitate
the development of a supermarket subject to the relocation of the bowling club.
5.6
Further, an Urban Design Framework for the Drysdale Town Centre is stated to
needed to be developed and implemented, including the Business 4 zoned land
along Murradoc Road.
The Nott Economic Report
5.7
In relation to the economic information that informed the Structure Plan, an
economic issues paper was prepared by Tim Nott in June 2008. Of relevance, at
pages 12‐13 of that report in relation to the Jetty Road Structure Plan area it is
noted that three centres were identified in the Jetty Road Structure Plan,
including a Neighbourhood Centre of up to 5,000 sq.m including a supermarket
of 2,500 sq.m (now a larger supermarket of 3,200 sq.m). The report further
states that the retail space provided in the Jetty Road area would reduce the
requirement for further growth in the Drysdale Town Centre.
5.8
Overall, the Tim Nott analysis indicates total additional retail space required in
the defined trade area over the period to 2031 is 14,300 sq.m, of which 6,600
sq.m would be accommodated in the Drysdale Town Centre.
5.9
The Tim Nott report reinforced the bowling club site as the preferred
development for a new supermarket. The site along Murradoc Road was
indicated to be outside the retail core of the centre which would discourage
walking between retail activities.
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6
DRYSDALE URBAN DESIGN FRAMEWORK
6.1
In response to the Drysdale Clifton Springs Structure Plan, the Drysdale Urban
Design Framework was adopted in August 2012. This document was prepared
for the City of Greater Geelong.
6.2
The objective, outlined on page 6 of the document, is to provide a framework to
improve the functionality of the centre by providing guidance on future growth
and development, built form like streetscapes, traffic and pedestrian
movements, car parking and land use.
6.3
The overall vision (also on page 6) is to create a vibrant precinct with a distinct
village character where the community can shop, work, recreate and socialise.
6.4
In relation to retail, key recommended changes from the previous Drysdale
Clifton Springs Structure Plan include:
i.
An extension of the Business 1 zoned land along Murrodoc Road to allow
for specialty retail, a new supermarket and better integration between the
existing Aldi supermarket and the Town Centre.
ii.
6.5
The retention of the Drysdale Bowling Club in its current location.
Page 53 of the Urban Design Framework indicates under the heading Drysdale
Bowling Club and Alternate Supermarket Sites in the second paragraph the
following:
“The immediate demand for an alternative supermarket has now been met by
the development of the Aldi supermarket along Murradoc Road and the
approval of a new full‐line supermarket within the Jetty Road growth area.
However, in the longer term (10 plus years), as the population of Drysdale and
the surrounding catchment grows, there is likely to be demand for a fourth
supermarket.”
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6.6
It follows that a full‐line supermarket along the Murradoc Road site was not
envisaged in this document until post 2022.
6.7
This is reinforced further on page 59 of the report under the Murradoc Road
Rezoning heading, where the following is stated:
“The economic analysis report prepared by Tim Nott, as part of the Structure
Plan, identifies a shortfall of retail floorspace by 2031 of 6,600 sq.m.
Approximately 1,000 sq.m of this space could be accommodated within
vacant land of existing shops and a newly constructed Aldi store occupies a
further 1,428 sq.m of retail space. The ultimately reduces the amount of
additional floorspace required by 2031 to 4,172 sq.m.
The EBD suggested the long term development of 2.5 hectares of land located
at the western end of Murradoc Road adjacent to the Town Centre could be
rezoned to Business 1 to facilitate the long term retail needs of the Town
Centre (Figure 50). While this amount of Business 1 zoned land would not be
required immediately, it could be rezoned in the future as the population
grows and the demand for it is established.”
6.8
In summary, the Drysdale Urban Design Framework set in motion the rezoning
of Business 4 land to Business 1 land along Murrodoc Road. It also identified the
Murrodoc rezoned land for a full‐line supermarket in the longer term, instead of
the Bowling Club site. The Coles proposal at Drysdale sits on some of this
rezoned land, but also land that was not rezoned to Business (Commerical) 1.
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7
MACROPLAN DIMASI ECONOMIC IMPACT ASSESSMENT 2013
7.1
Macroplan Dimasi prepared an economic impact assessment for the Coles
proposal at Drysdale in February 2013, as part of the original planning permit
application. The report has since been updated in May 2014.
7.2
The 2013 report is dated and I provide comment on the updated Macroplan
Dimasi report in Section 9 of this Statement of Evidence.
7.3
The key issue with the Macroplan Dimasi report of February 2013 is that it did
not assume the approved Jetty Road NAC would proceed, which is now under
construction. The findings of the report, therefore, are of limited relevance.
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8
TIM NOTT REVIEW OF ECONOMIC ASSESSMENT
8.1
Tim Nott prepared a review of the initial Macroplan Dimasi
economic
assessment for the Coles proposal at Drysdale (dated February 2013) in February
2014.
8.2
The key issues raised by Mr Nott included:
i.
A key omission of the MacroPlan Dimasi 2013 report is an assessment of
the impact of the Coles proposal on particular centres. Mr Nott says it is
difficult to understand from the MacroPlan Dimasi 2013 report how the
proposal will affect the hierarchy of activity centres serving the Drysdale
district, and whether any particular centres are at risk of losing their role
with a consequent loss of service to affected residents.
ii.
On page 22, Mr Nott identifies that the market for Jetty Road centre is
not yet in place. Consequently, Mr Nott indicates in order for the centre
to be viable, the facility as presently planned (at that time) would need
to capture trade from the broad swath of Clifton Springs, Drysdale and
beyond. It would effectively need to share the trade area of the Town
Centre. I note this was the intention of the centre as described in the
Jetty Road Urban Growth Plan.
iii.
Mr Nott indicates that the planned growth of the retail centre at Leopold
will have an impact on the Drysdale trade area and will set some limits
on the potential for expansion of food and grocery facilities in the trade
area. The impact on the Drysdale Town Centre from this development
was projected at 6% ‐ 7% by Mr Nott.
iv.
On page 31, Mr Nott outlines that it is clear there is insufficient room in
the market for both the Coles and Jetty Road developments to occur in
2016 and for both developments to achieve a typical level of sales per
sq.m.
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v.
Further, on page 31, Mr Nott states that if only one of the proposed
developments is constructed, demand will be satisfied in the short to
medium term, but there is likely to be room for the other proposed
development in the mid 2020s. The existing food and grocery retailers in
Drysdale and at the planned Jetty Road Neighbourhood Activity Centre
are expected to suffer a loss of trade above the threshold 10% ‐ 15% or
more, at up to 35%, which are considered very significant.
8.3
Importantly, on page 29, Mr Nott identifies the following consequences if the
Coles development proceeds:
i.
The Jetty Road Neighbourhood Activity Centre does not go ahead in its
present form or for some years; or
ii.
Whilst the Jetty Road supermarket opens as planned, the NAC may not be
able to sustain specialty foodstores such as a baker, butcher, green
grocer, etc.; as a consequence, shop units in the development may remain
vacant with adverse consequences on investor confidence and community
development.
8.4
I note that as the Jetty Road NAC is currently under construction, and that the
first option is not possible.
8.5
In Section 5.10 (page 29), Mr Nott projects that the most serious adverse impact
from the Coles supermarket proposal at Drysdale would be on the approved
Jetty Road Neighbourhood Activity Centre and on existing food and grocery
traders in the Drysdale Town Centre. Mr Nott goes on further to suggest options
for mitigating the trading impacts including:
i.
Reduce the size of the food and grocery provision at either Jetty Road
Neighbourhood Activity Centre or the Coles development to something in
the range of 1,500 sq.m – 1,800 sq.m. (Again this is not possible as the
Jetty Road NAC is currently under construction).
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ii.
Delay the Coles development, with each year’s delay resulting in a better
trading outcome for the existing and planned food and grocery operators.
(It is relevant to note Mr Nott indicated another store would not be
supportable until the mid 2020s).
iii.
Assist the change‐over of affected shops in Drysdale, Jetty Road and
elsewhere from food and grocery provision to non‐food or service
establishments.
8.6
Section 5.12 of the Tim Nott report expresses his view that statements in the
Drysdale Structure Plan remain valid, and the view that it continues to be the
case that the demand for a new full‐line supermarket is some way off if the Jetty
Road Neighbourhood Activity Centre proceeds as planned.
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9
MACROPLAN DIMASI ECONOMIC IMPACT ASSESSMENT 2014
9.1
An updated economic impact assessment was prepared in relation to the subject
Coles development at Murradoc Road, Drysdale, in May 2014 by MacroPlan
Dimasi. The staff responsible for that report include Joel Taylor (General
Manager), Alexander O’Rielly (Analyst) and Jake McKinnon (Analyst).
9.2
The economic impact assessment presents a typical analysis for such a report
including:
i.
Definition of the trade area.
ii.
Outline of population and retail spending levels in the trade area.
iii.
A review of the competitive environment.
iv.
Projected sales for the development.
v.
Outlines the likely impacts on competing facilities at a high level only and
not a detailed centre level.
9.3
My key concerns with the MacroPlan Dimasi report are as follows:
i.
In general, I agree with the extent of the defined trade area for the subject
development and the Drysdale Town Centre generally. In my view,
however, this trade area should be broken up into primary and secondary
sectors, as will be discussed in further sections of this report.
ii.
In Section 4.1, the MacroPlan Dimasi report indicates the provision of
supermarket floorspace per 1,000
residents throughout
Australia at
present is around 320 – 350 sq.m. On the bottom of page 26, it further says
that given the continued population growth and accessibility throughout
the region, they estimate the potential supermarket floorspace per 1,000
residents should be at least 400 – 500 sq.m in Drysdale, if not higher, to
ensure capacity of supermarkets to serve residents and visitors during peak
holiday periods.
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To this end, Table 4.1 of the MacroPlan Dimasi report indicates some
14,162 sq.m of supermarket floorspace in the Drysdale trade area by 2018,
which would serve around 21,500 persons by that time according to the
MacroPlan Dimasi population forecasts in Table 2.1. This represents a
provision of some 660 sq.m per 1,000 residents by that time, well above the
MacroPlan Dimasi recommended levels of 400 – 500 sq.m per 1,000
residents. Indeed, based on the provision of 14,162 sq.m of supermarket
floorspace in the trade area, by 2026, with a projected population of 25,830
sq.m, the provision would be 548 sq.m per 1,000 residents, still above the
MacroPlan Dimasi recommended level.
This analysis on its own indicates the provision of supermarket floorspace
proposed in the trade area, in addition to existing and currently under
construction facilities (Jetty Road), is not supportable for at least ten years.
iii.
Table 6.1 of the MacroPlan Dimasi report presents an analysis of
supermarket capacity in the Drysdale catchment. In my view, these figures
overestimate the capacity for supermarkets on the following basis:

In Australia, around 70% – 75% of trade area food and grocery
spending is available to supermarkets. This point is reinforced on
page 29 of the MacroPlan Dimasi report where they state this figure
is 70% ‐ 80% in the second paragraph. In Table 4.1, a figure of 85%
of trade area food and grocery spending available to supermarkets
is then outlined. This is clearly too high.

The figures in the text on page 29 do not match the figures in Table
4.1.

Even on the above assumptions by 2018, the estimated trading
level for supermarkets are less than $8,000 per sq.m including GST.
The average trading level falls between 2017 to 2018 from $10,253
per sq.m to $7,863 per sq.m. This represents an impact on
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supermarket trading levels of 23% from the Coles development in
that year. Importantly, the above impact on supermarkets is an
average impact with supermarkets closer to the Coles development
to be impacted to a greater degree, and supermarkets further away
(at Portarlington and St Leonards) impacted to a lower degree.
Impacts on some supermarkets, therefore, are likely to be in‐excess
of 30% based on MacroPlan Dimasi numbers.
Given an average trading level of less than $8,000 per sq.m for all
supermarkets, and the concentration of supermarkets around
Drysdale/Jetty Road, one (or a number) of those stores are likely to
achieve sales much lower than $8,000 per sq.m, and the viability of
such a store would be questionable in this environment.
To this end, Map 9.1 outlines the MacroPlan Dimasi proposed
catchment for the Jetty Road NAC (which is currently under
construction). There are currently only some 2,500 persons within
this trade area, which is a much lower than required for a typical
full‐line supermarket of 8,000 – 9,000 persons. This definition is
inconsistent with that outlined in Jetty Road Urban Growth Plan of
2007, which was discussed previously in Section 3 of my report, and
indicated the Jetty Road NAC would serve a primary sector
containing the Jetty Road growth area but also serve a secondary
sector comprising the balance of the Drysdale/Clifton Springs urban
areas.
iv.
Section 6.4 of the MacroPlan Dimasi report deals with the conclusions of
the Tim Nott analysis of February 2014. The conclusion at Section 6.4 at the
last paragraph of the report is:
“The above provides a basis to justify the development of Coles subject
to the Jetty Road Neighbourhood Activity Centre being at a reduced
size (anecdotally advised by City of Geelong Council) providing that the
26
Statement of Evidence
City of Geelong Planning Scheme Amendment C297
centre does not alter the centres hierarchy (i.e. a full‐line
supermarket). The reduced size of the Jetty Road centre is suggested
at 1,500 sq.m – 1,800 sq.m.”
The Jetty Road development, however, is under construction at its approved size
of 4,444 sq.m including a 3,200 sq.m Woolworths supermarket. The ability to
justify the development of the Coles facility on the basis of reducing Jetty Road,
therefore, is not a possible outcome. The likely impacts that are identified by
Tim Nott for the Coles proposal, therefore, would be significant.
27
Statement of Evidence
City of Geelong Planning Scheme Amendment C297
MAP 9.1 – MACROPLAN DIMASI JETTY ROAD TRADE AREA
28
Statement of Evidence
10
TRADE AREA ANALYSIS – DRYSDALE TOWN CENTRE
10.1
This section of the report reviews the trade area likely to be served by the Coles
development and retail facilities of the Drysdale Town Centre generally, to assist
in analysing future supportable retail floorspace, and the allocation of that
floorspace.
10.2
The trade area served by any shopping centre is influenced by the following
factors:
10.3
i.
The scale and composition of the centre.
ii.
The provision of competitive retail facilities throughout the region.
iii.
Regional and local accessibility.
iv.
The pattern of urban development.
v.
Significant physical and man‐made barriers.
On the basis of all of the above, Map 10.1 illustrates the trade area likely to be
served by the Coles development and retail facilities generally throughout the
Drysdale Town centre, including one primary and two secondary sectors as
follows:
i.
A primary sector including Clifton Springs and Drysdale, as well as an area
up to 5 km around the Drysdale township.
10.4
ii.
A secondary north‐east sector comprising Portarlington.
iii.
A secondary east sector containing St Leonards and Indented Heads.
The extent of the trade area is limited by non‐urban areas to the south and retail
facilities at Leopold including a proposed sub‐regional centre to the west.
29
Statement of Evidence
City of Geelong Planning Scheme Amendment C297
MAP 10.1 – DRYSDALE MAIN TRADE AREA
30
Statement of Evidence
10.5
The combination of the primary and secondary sectors is referred to throughout
the remainder of this report as the main trade area served by the proposed
Coles centre.
Population Levels
10.6
Table 10.1 details current and projected main trade area population levels for
the Drysdale area. This information is sourced from the following:
i.
The 2006 and 2011 Census of Population and Housing undertaken by the
Australian Bureau of Statistics (ABS).
ii.
New dwelling approvals sourced from the ABS over the period from
2006/07 to 2013/14.
iii.
Although dated, 2012 population projections at a small area level prepared
by Forecast .id for the City of Greater Geelong.
iv.
Official Victorian Department of Planning and Community Development
forecasts at a Statistical Local Area (SLA) level.
v.
10.7
Investigations by me into new residential developments in the region.
The main trade area population is currently estimated at 19,730 including
12,670 persons in the primary sector. The main trade area population is
projected to increase to 25,280 persons by 2026 including 16,670 persons in the
primary sector. The population growth figures assume a significant uplift in
growth in the primary sector population over time due to Jetty Road
development. Initial indications, however, are that growth is not occurring as
fast as indicated under official projections. These population forecasts,
therefore, are likely to present a highest case scenario.
31
Statement of Evidence
TABLE 10.1 – TRADE AREA POPULATION
Trade Area
Sector
Primary Sector
Estimated
Resident Population
2006
2011
2014
Forecast
Population
2016
2021
2026
10,980
11,920
12,670
13,170
14,920
16,670
• North
3,530
3,640
3,790
3,890
4,240
4,590
• East
2,310
2,970
3,270
3,470
3,770
4,020
Total Secondary
5,840
6,610
7,060
7,360
8,010
8,610
Main Trade Area
16,820
18,530
19,730
20,530
22,930
25,280
Secondary Sectors
Average Annual Change (No.)
2006‐2011
Primary Sector
2011‐2014
2014‐2016
2016‐2021
2021‐2026
188
250
250
350
350
22
50
50
70
70
• East
132
100
100
60
50
Total Secondary
154
150
150
130
120
Main Trade Area
342
400
400
480
470
Secondary Sectors
• North
Average Annual Change (%)
2006‐2011
Primary Sector
2011‐2014
2014‐2016
2016‐2021
2021‐2026
1.7%
2.1%
2.0%
2.5%
2.2%
• North
0.6%
1.4%
1.3%
1.7%
1.6%
• East
5.2%
3.3%
3.0%
1.7%
1.3%
Total Secondary
2.5%
2.2%
2.1%
1.7%
1.5%
Main Trade Area
2.0%
2.1%
2.0%
2.2%
2.0%
Australian Average
1.5%
1.5%
1.4%
1.3%
1.2%
Secondary Sectors
All figures as at June
All figures are based on 2011 SA1 boundary definition with the exception of 2006 which is based
on 2006 CCD boundary definition. 2006 and 2011 ERP is calculated using 2011 enumeration factor.
Sources : ABS; forecast .id
32
Statement of Evidence
Socio‐economic Profile
10.8
Table 10.2 details the socio‐economic profile of the trade area population based
on the Australian Bureau of Statistics (ABS) 2011 Census of Population and
Housing compared with non‐metropolitan Victorian and Australian averages.
They key information presented includes:
i.
Trade area residents earn average income levels in‐line with comparable
non‐metropolitan Victorian averages on both a per capita and per
household basis.
ii.
The average age of trade area residents is significantly older than
benchmark averages, particularly in the secondary sectors.
iii.
There is a high proportion of home ownership.
iv.
The population is predominantly Australian born.
33
Statement of Evidence
TABLE 10.2 – SOCIO‐ECONOMIC PROFILE
Characteristics
Primary
Sector
Secondary Sectors
North
East
Income Levels
Average Per Capita Income
$28,904
$28,149
$26,056
$28,298
$28,456
$34,201
Per Capita Income Variation
1.6%
‐1.1%
‐8.4%
‐0.6%
n.a.
n.a.
Average Household Income
$73,549
$57,323
$56,209
$66,806
$69,058
$87,928
Household Income Variation
6.5%
‐17.0%
‐18.6%
‐3.3%
n.a.
n.a.
2.5
2.0
2.2
2.4
2.4
2.6
Aged 0‐14
18.1%
12.3%
15.4%
16.5%
19.2%
19.3%
Aged 15‐19
7.6%
4.9%
4.1%
6.5%
6.8%
6.5%
Aged 20‐29
9.4%
6.5%
6.3%
8.4%
10.9%
13.8%
Aged 30‐39
10.2%
6.9%
8.6%
9.3%
11.4%
13.8%
Aged 40‐49
13.3%
11.1%
11.5%
12.6%
13.7%
14.2%
Aged 50‐59
13.9%
13.6%
15.3%
14.1%
13.9%
12.8%
Aged 60+
27.5%
44.7%
38.8%
32.6%
24.1%
19.6%
41.7
50.1
47.3
44.2
40.1
37.9
Housing Status (% of H'holds)
Owner/Purchaser
83.2%
76.3%
74.5%
80.5%
74.6%
69.3%
Renter
16.8%
23.7%
25.5%
19.5%
25.4%
30.7%
Birthplace (% of Pop'n)
Australian Born
85.6%
84.5%
83.5%
85.0%
88.7%
73.9%
Overseas Born
14.4%
15.5%
16.5%
15.0%
11.3%
26.1%
• Asia
1.0%
1.1%
0.2%
0.9%
1.6%
7.6%
• Europe
10.6%
11.5%
13.2%
11.2%
6.5%
9.4%
• Other
2.9%
2.9%
3.1%
2.9%
3.2%
9.1%
Family Type (% of Pop'n)
Couple with dep't children
44.1%
26.7%
28.6%
38.2%
42.0%
45.3%
Couple with non‐dep't child.
7.5%
7.0%
6.5%
7.2%
6.5%
7.7%
Couple without children
27.8%
37.3%
37.0%
31.1%
25.7%
23.0%
Single with dep't child.
8.5%
9.4%
9.5%
8.9%
9.8%
9.2%
Single with non‐dep't child.
2.8%
2.7%
2.2%
2.7%
3.1%
3.5%
Other family
0.6%
0.7%
0.7%
0.6%
0.8%
1.1%
Lone person
8.8%
16.1%
15.4%
11.3%
12.3%
10.2%
Average Household Size
Main Non Metro Vic Aust
TA
Average
Average
Age Distribution (% of Pop'n)
Average Age
Sources : ABS Census of Population and Housing 2011
34
Statement of Evidence
Competition
10.9
Table 10.3 details the competitive environment within the broader region.
10.10 The key facilities include:
i.
The Drysdale Town Centre, with the major component being Drysdale
Village anchored by a Woolworths supermarket of 2,757 sq.m. There are
approximately further 70 – 80 shops within the remainder of the Town
Centre including an Aldi store of 1,400 sq.m.
ii.
Portarlington Town Centre is located in the secondary north sector and
includes a Woolworths supermarket of 1,533 sq.m as well as IGA of 500
sq.m as well as around 25 specialty stores.
iii.
A recently constructed IGA store of 1,158 sq.m has been developed at St
Leonards.
10.11 Beyond the trade area, major facilities are at Leopold including Leopold Gateway
Shopping Centre, anchored by a Coles supermarket of 3,200 sq.m. This centre is
proposed for expansion to a major sub‐regional centre anchored by a discount
department store and a second supermarket and further mini‐major and
specialty shops. A trade area for this centre extends to include the entire trade
area of Drysdale.
10.12 Other facilities are located to the south at Ocean Grove, Queenscliff and Barwin
Heads.
10.13 In terms of proposed facilities, the Jetty Road Neighbourhood Activity Centre is
currently under construction and will be 4,444 sq.m in size, including a
Woolworths supermarket of 3,200 sq.m.
35
Statement of Evidence
TABLE 10.3 – DRYSDALE COMPETITIVE ENVIRONMENT
Shopfront
GLA
(sq.m)
Centre
Anchor Tenants
Supermarket Based Shopping Centres
Drysdale
11,600
Dist. From
Drysdale
(km)
‐
• Drysdale Village
3,200
Woolworths (2,757)
• Remainder
8,400
Aldi (1,400)
Portarlington
5,000
Woolworths (1,533), IGA (500)
10.0
St Leonards
3,000
IGA (1,158)
13.5
Leopold
9,500
• Leopold Gateway SC
7,500
Coles (3,200)
11.6
• Remainder
2,000
Foodworks (700)
Ocean Grove
20,000
Target Country (1,300),
13.3
Woolworths (3,511), Coles (2,500)
Queenscliff
6,000
Foodworks (600)
20.0
Barwon Heads
4,000
IGA (500)
16.6
Source : Australian Shopping Centre Council Database
36
Statement of Evidence
11
RETAIL FLOORSPACE DEMAND
11.1
This section presents an assessment of the potential for additional facilities as
proposed at the Coles supermarket development at Drysdale and in particular
additional supermarket facilities.
Supermarket Provision
11.2
Table 11.1 outlines the current provision of supermarket floorspace within the
defined trade area and compares this provision with the Victorian and Australian
averages. For the purposes of this report, supermarkets have been defined as
being greater than 500 sq.m in size. The current provision of supermarket
floorspace at 372 sq.m per 1,000 residents is slightly above comparable
averages.
11.3
Table 11.2 outlines the provision of supermarket floorspace in 2017/18 after the
opening of the Woolworths at Jetty Road and the Coles supermarket at
Drysdale. The provision of floorspace by that time at 681 sq.m per 1,000
residents would be double the comparable Victorian and Australian averages.
11.4
This analysis shows that supermarket floorspace is more than double the non‐
metropolitan Victorian and Australian averages following the opening of all
supermarkets within the trade area, compared with the current provision
roughly in‐line with these averages. The proposed provision of supermarket
floorspace indicates that there will be a significant oversupply of floorspace by
2017/18.
11.5
Full‐line supermarkets are typically considered to be around 2,500 sq.m or larger
in size and cater for a typical weekly grocery shop with a full range of
departments and dry goods. A major full‐line supermarket is typically 3,000 sq.m
and above and is a typical modern offer prepared by the Coles and Woolworths
chains. The existing Woolworths supermarket in town is slightly small by modern
37
Statement of Evidence
standards, but appears to be trading very well. The Woolworths supermarket
under construction at Jetty Road will be a modern, full‐line offer.
TABLE 11.1 – CURRENT TRADE AREA SUPERMARKET PROVISION, 2014
Trade Area
Sector
No. of
Supermarkets*
GLA
(sq.m)
2014
Population
2
4,157
12,670
328
• North
2
2,033
3,790
536
• East
1
1,158
3,270
354
Total Secondary
3
3,191
7,060
452
Main Trade Area
5
7,348
19,730
372
Primary
GLA per
1,000 persons
Secondary Sectors
Victorian Average
333
Australian Average
325
* Defined as 500 sq.m or larger
TABLE 11.2 – PROJECTED TRADE AREA SUPERMARKET PROVISION, 2018
GLA
(sq.m)
2018
Population
4
11,249
14,130
796
• North
2
2,033
3,790
536
• East
1
1,158
3,270
354
Total Secondary
3
3,191
7,060
452
Main Trade Area
7
14,440
21,190
681
Trade Area
Sector
Primary
No. of
Supermarkets*
GLA per
1,000 persons
Secondary Sectors
Victorian Average
333
Australian Average
325
* Defined as 500 sq.m or larger
38
Statement of Evidence
11.6
A major full‐line supermarket of over 3,000 sq.m is typically provided for every
8,000 – 9,000 persons. The primary sector population at 12,670 persons would
indicate support for one store, with a current main trade area population of
under 20,000 persons indicates support for two stores. Even taking into account
an allowance for tourists in the area adding to demand, (but also allowing for
some escape expenditure to the larger facilities at Leopold and other locations
over time), this provision is sustainable.
11.7
With a trade area population in‐excess of 25,000 persons by 2026, a third full‐
line supermarket in Drysdale is likely to be supportable in time.
Supermarket Performance
11.8
Table 11.3 details the potential sales for supermarkets within the Drysdale trade
area. Calculations in this table go through a series of steps, commencing with
available expenditure that is of relevance to supermarkets, namely food and
grocery spending; assessing the share of expenditure which supermarkets are
likely to achieve; concluding the likely sales which main trade area supermarkets
can expect to generate.
11.9
The assessment detailed in Table 11.3 is based on the experience of many
comparable analyses in locations throughout Australia. Projected sales are
detailed assuming the opening of the Woolworths supermarket at Jetty Road of
3,200 sq.m, as well as the Coles supermarket of 3,892 sq.m at Drysdale.
Supermarkets are defined as grocery and dry goods stores of at least 500 sq.m.
11.10 The analysis proceeds on the basis that the Coles supermarket at Drysdale does
not open until 2018 (as suggested by MacroPlan Dimasi) despite being approved
in 2014/15 as is being proposed.
11.11 The analysis in Table 11.3 is as follows:
i.
For the main trade area defined earlier in this report, the total food and
grocery spending market is projected at $109.9 million for the year to June
39
Statement of Evidence
2014. The food and grocery spending market for the main trade area
population is projected to grow to $121.9 million by 2018 and further to
$149.5 million by 2026 (constant 2014 dollars).
ii.
Typically in Australia, approximately 70% ‐ 75% of food and grocery
expenditure is directed to supermarkets, not including small corner stores,
convenience stores and milk bars. This ratio varies from location to location
depending on the provision of such facilities and the socio‐economic profile
of the trade area population. In the defined main trade area, the
proportion of spending to supermarkets is currently estimated at 75%
given the limited number of existing supermarkets within the region. This
proportion is projected to increase to 77.5% by 2018 following the opening
of Woolworths at Jetty Road and Coles at Drysdale.
iii.
The next step in the analysis is to estimate the likely proportion of food and
grocery expenditure which can be retained by main trade area
supermarkets as compared with spending directed to supermarkets
beyond the main trade area at locations such as Leopold, Newcombe, etc.
iv.
It is estimated that 79.3% of main trade area food and grocery spending is
retained by trade area supermarkets. The level of retained spending is
projected to increase to 88.4% in 2018.
v.
Additionally, an estimated 20% of total supermarket sales are likely to be
attracted from beyond the defined main trade area reflecting tourism.
11.12 The steps detailed above generate the annual estimates of food and grocery
spending available to supermarkets within the main trade area. This figure is
projected at $105.0 million in 2018. This figure does not include retail inflation,
thus the increase shown reflects real growth. By 2026, available food and
grocery spending directed to main trade area supermarkets is projected to
increase to $128.7 million, expressed in constant 2014 dollar terms.
40
Statement of Evidence
TABLE 11.3 – SUPERMARKET SALES POTENTIAL
2014
Financial Year
2017
2018
2021
2026
Total Food & Grocery (F&G) Spending
• Primary
69.5
75.0
77.3
84.6
97.0
• Secondary North
21.9
23.1
23.7
25.3
28.1
• Secondary East
18.5
20.4
20.9
22.3
24.4
Main Trade Area
109.9
118.6
121.9
132.2
149.5
52.1
57.0
59.9
65.5
75.2
• Secondary North (@ 75% incr. to 77.5% in 17/18)"
16.4
17.6
18.3
19.6
21.8
• Secondary East (@ 75% incr. to 77.5% in 17 /18)"
13.9
15.5
16.2
17.3
18.9
Main Trade Area (@ 75% incr. to 77.5% in 17/18)"
82.4
90.2
94.4
102.4
115.9
40.4
47.0
52.4
57.4
65.8
• Secondary North (@ 82.5% incr. to 90% in 17/18)"
13.5
15.4
16.5
17.6
19.6
• Secondary East (@ 82.5% incr. to 90% in 17 /18)"
11.5
13.6
14.6
15.5
17.0
Main Trade Area (@ 79.3% incr. to 88.4% in 17/18)"
65.4
76.0
83.5
90.5
102.4
F&G Sales from Beyond TA (@ 21.9% decr. to 20.4% in 17/18)
18.4
19.5
21.5
23.3
26.3
Total F&G Sales for TA Smkts
83.8
95.6
105.0
113.8
128.7
F&G Spending to Supermarkets
• Primary (@ 75% incr. to 77.5% in 17/18)"
F&G Spending Retained by TA Smkts
• Primary (@ 77.5% incr. to 87.5% in 17/18)"
General Merchandise Sales (@ 6%)
5.3
6.1
6.7
7.3
8.2
89.1
101.7
111.7
121.1
136.9
Smkt Floorspace in TA (sq.m)**
7,348
10,548
14,440
14,440
14,440
Average Trading Level ($/sq.m)
12,130
9,638
7,732
8,384
9,483
0.0
0.0
30.1
32.9
37.5
Total TA Smkt Sales
Distribution of TA Smkt Sales
Coles Drysdale
Woolworths Jetty Road
0.0
23.8
18.4
20.6
24.7
Other TA Supermarkets**
89.1
77.8
63.1
67.5
74.7
Total TA Smkt Sales
89.1
101.7
111.7
121.1
136.9
*Constant 2013/14 dollars & Including GST
**Existing supermarket in TA as at November 2014 include WOW and Aldi Drysdale, IGA and WOW Portarlington and iGA St Leonards
11.13 Finally, in order to estimate the total likely sales volume available to main trade
area supermarkets, additional components of sales other than food and grocery
is taken into account. The major component of sales other than food and
grocery sales that supermarkets typically include are general merchandise and
non‐food items. Non‐food items typically generate around 6% of total store
41
Statement of Evidence
sales for modern supermarket chains. On this basis, the total volume of sales
available to main trade area supermarkets is estimated to increase to $111.7
million in 2018. Note that liquor is not included in this analysis.
11.14 Existing main trade area supermarkets are currently estimated to be recording
strong sales of $12,131 per sq.m, which is higher than the average sales level
recorded
by
major
supermarkets
throughout
Australia
of
around
$9,000 per sq.m.
11.15 At the bottom of Table 11.3, the distribution of sales for supermarkets in the
main trade area is detailed. This indicates some very low trading levels,
particularly for the Jetty Road supermarket at $18.4 million, or less than $5,750
per sq.m in 2018, well below the average for typical stores of $9,000 per sq.m.
This indicates the proposed Woolworths store at Jetty Road would be impacted
significantly if Coles is also developed by around 23% from 2017 – 2018.
11.16 In addition, other trade area supermarkets would also be impacted by 19% on
average from the opening of the Coles store at Drysdale, with the impact on
Woolworths at Drysdale to be significantly higher than supermarkets at
Portarlington and Indented Heads, in the order of 25%.
11.17 Clearly, based on the above, there is only potential for one full‐line supermarket
within the defined trade area over the next 10 years, with a further full‐line
supermarket not being sustainable until post 2021 (at the earliest).
11.18 The results of my analysis, therefore, are consistent with Mr Tim Nott’s,
indicating that the addition of two full‐line supermarkets in the Drysdale trade
area are not supportable by 2018, and more likely to be not supportable for
around ten years.
42
Statement of Evidence
Centre Impacts
11.19 Based on the impacts on the supermarkets outlined above, the likely sales
impacts on competitive retail centres/facilities as a result of the development of
the Coles is now considered.
11.20 Table 11.4 outlines projected sales impacts. The steps involved in assessing the
sales impacts on competitive centres are presented as follows:
i.
Step 1 – estimate sales levels for existing centres in 2013/14 Financial
Year.
ii.
Step 2 – project sales for existing centres in 2017/18 Financial Year, the
first full‐year of trading for the Coles supermarket. These projections
allow for retail market growth and new and expanded retailers/centres.
All sales projections in 2017/18 are presented in constant 2014 dollars
(excluding inflation).
iii.
Step 3 – outline the change in sales at each centre in 2017/18 as a result
of the Coles development. Again, all sales expressed in constant 2014
dollars.
iv.
Step 4 – show the impact on sales in 2017/18 on other centres both in
dollar terms and percentage of sales.
11.21 The largest impact from the Coles development are as follows:
i.
The highest dollar impact would be on Drysdale Plaza at around $10.5
million or 22.5%, closely followed by the impact on the Jetty Road
Neighbourhood Centre at $7.1 million and 24.4%.
11.22 In my experience, the usual range of impacts are considered as:
i.
Up to 10% impact – generally acceptable.
ii.
10% ‐ 15% – high impacts.
43
Statement of Evidence
iii.
15% and over – very high impacts.
11.23 High to very high impacts are projected for the Jetty Road NAC and Drysdale
Town Centre. These impacts need to be factored against the trading levels of
existing centres, their composition, and the ability of existing centres and major
traders to continue to operate.
TABLE 11.4 – CENTRE IMPACTS, 2018
Unit
Estimated
2014
Projected 2018
Pre Dev. Post Dev.
Impact 2018
$M
%
Coles Drysdale
$M
n.a.
n.a.
30.1
n.a.
n.a.
Drysdale
• Drysdale Village
• Remainder
$M
$M
$M
88.8
52.0
36.8
81.5
46.5
35.0
67.0
36.0
31.0
‐14.5
‐10.5
‐4.0
‐17.8%
‐22.5%
‐11.5%
Jetty Road
$M
0.0
29.3
22.1
‐7.1
‐24.3%
Portarlington
$M
31.5
33.5
31.8
‐1.7
‐5.0%
St Leonards
Leopold Gateway SC
$M
$M
16.3
57.0
17.7
135.5
16.8
130.8
‐0.9
‐4.7
‐5.0%
‐3.5%
*Constant 2013/14 dollars & Including GST
¹ Proposed centres and expansions assumed to be trading for a full year by FY2018
Community Implications
11.24 As outlined previously, of particular concern would be the ability for the
Woolworths supermarket to trade at viable levels at the Jetty Road
Neighbourhood Centre and, therefore, sustain a provision of specialty shops at
that site.
11.25 The projected trading level for the Woolworths supermarket at Jetty Road as a
result of the Coles centre opening would be less than $6,000 per sq.m, which is
well below the average for major chain supermarkets of around $9,000 per
sq.m. This is not to say that Woolworths would close its store but it would be
unlikely be a profitable store. At this level, specialty stores are also unlikely to be
attracted or sustainable at the site.
11.26 The key implications for the community are threefold:
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Statement of Evidence
I.
Convenience – If the Jetty Road NAC is unable to sustain specialty shops,
then convenience will be severely reduced as residents who would look to
undertake complementary shopping with the supermarket will be unable to
do their full‐convenience shop at Jetty Road. These residents would have to
visit Drysdale Town Centre to complete their day to day shop. Further,
service and stock levels in the new Woolworths supermarket might be
reduced due to low trading levels, impacting on the offering and
convenience of the centre.
II.
Choice – Residents of the Drysdale/Clifton Springs will have their choice of
shopping destination reduced with the Jetty Road NAC providing a much
more limited offering than intended, particularly in relation to convenience
specialty shops.
III.
Competition ‐ The number of new specialty shops in the market will be
reduced, potentially impacting on competition.
11.27 Impacts on specialty stores and Aldi within the remainder of the Drysdale Town
Centre are projected at 11.5% on average. This is an average impact with some
higher impacts on fresh food specialty stores and the like within the Town
Centre who compete directly with the Coles supermarket. In comparison, other
facilities which do not compete directly with the Coles supermarket are likely to
be impacted minimally, if at all.
11.28 I note that these impacts will be in addition to any impact from the expansion at
Leopold and the Jetty Road NAC itself. Total sales for all retailers in the Drysdale
Town Centre are projected to fall from $88.8 million currently to $67.0 post the
opening of the Coles supermarket at Drysdale in 2018 (and allowing for the
Leopold expansion and the opening of the Jetty Road NAC). This represents a
cumulative impact of 25% from current trading levels.
11.29 Based on the above, the implications for the community will be a potential loss
in specialty offer in the township, resulting in vacancies. In addition there is a
45
Statement of Evidence
high likelihood of lack of reinvestment in retail facilities in the Drydsale Town
Centre, for both Drysdale Plaza and remainder of specialty stores in the Town
Centre.
11.30 Another important factor to consider is the ability for centres to recover sales
over time. In my view, this will be relatively limited given the trade area
population is only projected to grow at 400 – 500 persons per year in a best case
scenario. This slow rate of growth in total terms (rather than percentage terms)
will also impact on reinvestment in retail facilities.
46
Statement of Evidence
12
CONCLUSIONS
12.1
In my view, there is only sufficient demand for one additional full‐line
supermarket in the Drysdale catchment over the period to 2018. The ability for a
further full‐line supermarket is unlikely to accrue until after 2021 at the earliest.
12.2
This conclusion is consistent with the retail study prepared by Tim Nott Planning
for the City of Greater Geelong in his review of the MacroPlan Dimasi 2013
economic impact assessment for the proposed Coles development. I agree with
Mr Tim Nott’s conclusion that the impacts of approving the Coles development
at this time would be to place in jeopardy the Jetty Road Neighbourhood Activity
Centre in particular.
12.3
MacroPlan Dimasi’s assessment of the provision of supermarket floorspace
indicating a supportable level at 400 – 500 sq.m per 1,000 residents is well
above comparable averages of 300 – 350 sq.m per 1,000 residents. If the Coles
proposal proceed, however, the provision of supermarket floorspace in the
trade area by 2018 would be over 650 sq.m per 1,000 residents, well above the
MacroPlan Dimasi recommended level.
12.4
Overall, my analysis of net community benefit shows the following:
i.
The need for the proposed Coles supermarket is limited given:
 The limited population base in the primary trade area and the inability
to sustainably support three full‐line supermarkets.
 The current access to existing supermarkets as well as the Jetty Road
NAC that is currently under construction.
ii.
The economic impact from the proposed Coles supermarket will be
particularly high on the Jetty Road NAC and on Drysdale Plaza/specialty
stores in the Drysdale Town Centre. Although Woolworths are unlikely to
close at either of these locations, the impact on specialty stores and the
47
Statement of Evidence
provision of facilities for residents in the immediate Jetty Road region
would be reduced as a result of the inability to lease specialty. This will
impact on choice, convenience and competition for the Jetty Road growth
area residents as well as residents in the broader Drysdale/Clifton Springs
urban area.
iii.
There would also be a loss in jobs at locations such as Jetty Road which
may be offset by jobs at the Coles centre.
iv.
The ability to reinvest in existing centres such as Drysdale Plaza and existing
specialty shops in the Town Centre would also be significantly reduced if
this proposal was to proceed, given the high level of impacts from the
proposal in combination from impacts as a result of the Leopold expansion
and Jetty Road NAC.
Signed:
Gavin Duane
14th November 2014
48
Statement of Evidence
APPENDIX 1
APPENDIX 1
GAVIN DUANE CURRICULUM VITAE
Gavin studied at the University of Melbourne between 1988 and 1991, graduating with a
Bachelor of Economic (Honours). After a year at Melbourne Water as a graduate economist,
Gavin commenced work in the field of retail and shopping centre analysis at JHD Advisors in
November 1993.
Since 1993 Gavin has provided independent advice in the fields of market analysis and
strategic research for a wide range of clients in the retail and shopping centre industries. He
founded Duane Location IQ in January 2009. Prior to that time Gavin joined Dimasi Strategic
Research as an Associate Director in April 2003. Dimasi Strategic Research was acquired by
Pitney Bowes MapInfo in August 2005. Gavin held the role of Director of Client Services for
the Strategy & Analytics division until December 2008.
Gavin regularly appears as an independent expert in state planning courts and tribunals, on
matters relating to economic impact assessments, retail market definitions, industry trends,
market shares, consumer behaviour and their implications.
50
Appendix 1
APPENDIX 2
APPENDIX 2
52
ECONOMIC IMPACTS DATA CLAUSE 22.03
Appendix 2
53
Appendix 2
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